Versabank (TSE:VBNK)
TSX:VBNK
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Versabank
(TSX:VBNK)
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Rating:64Neutral
Price Target:
C$20.50
▼(-2.52% Downside)
Action:ReiteratedDate:03/26/26
The score is driven primarily by steady financial fundamentals (improving leverage and strong recent cash generation) and a supportive earnings-call outlook for U.S. growth and operating leverage. These positives are tempered by notably weaker recent profitability metrics (lower margins/ROE) and a weak technical setup with negative momentum and the price below key moving averages; valuation is neutral with a modest P/E and low yield.
Positive Factors
Cash generation / free cash flow
Consistent positive operating and free cash flow that roughly matches net income indicates durable cash conversion. This strengthens internal funding capacity for SRP growth, reduces reliance on costly external funding and supports capital returns or investment, improving long-term financial flexibility.
Negative Factors
Compressed profitability and ROE
Material margin and ROE compression reduce long-term earnings power and capital accumulation. Lower profitability limits retained earnings for organic growth, constrains dividend capacity, and raises the bar for the bank to deliver attractive shareholder returns even if top-line growth continues.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation / free cash flow
Consistent positive operating and free cash flow that roughly matches net income indicates durable cash conversion. This strengthens internal funding capacity for SRP growth, reduces reliance on costly external funding and supports capital returns or investment, improving long-term financial flexibility.
Read all positive factors
Versabank (VBNK) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$674.42M
Dividend Yield0.49%
Average Volume (3M)22.00K
Price to Earnings (P/E)15.3
Beta (1Y)1.48
Revenue Growth3.31%
EPS Growth-39.12%
CountryCA
Employees121
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.38
Shares Outstanding32,069,447
10 Day Avg. Volume37,575
30 Day Avg. Volume21,998
Financial Highlights & Ratios
PEG Ratio-0.47
Price to Book (P/B)0.99
Price to Sales (P/S)1.73
P/FCF Ratio3.53
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$21.26Price Target Upside1.08% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)1.74
Revenue Forecast (FY)C$155.32M
Versabank Business Overview & Revenue Model
Company Description
VersaBank, a schedule I chartered bank, provides various banking products and services in Canada. The company offers deposit products, such as guaranteed investment certificates, registered retirement savings plans, daily interest savings accounts...
How the Company Makes Money
VersaBank primarily makes money through net interest income: it earns interest and fees on its loan and financing portfolios and pays interest on its funding sources (including customer deposits and other funding), keeping the spread as income. A ...
Versabank Earnings Call Summary
Earnings Call Date:Mar 04, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jun 10, 2026
Earnings Call Sentiment Positive
The call conveyed strong and broad-based growth: record assets, revenues, credit assets and adjusted earnings with material acceleration of the U.S. structured receivable program and validation of the digital asset custody strategy. Capital and margins improved while credit provisions remained de minimis. Offsetting factors include near-term reorganization and divestiture costs, higher-than-normal liquidity depressing NIM, and a cybersecurity unit that is loss-making in transition. Management expects these headwinds to be temporary and to be more than offset by operating leverage as SRP fundings scale, supporting a favorable medium-term outlook.Positive Updates
Strong Top-Line and Asset Growth
Total assets grew to over CAD 6.1 billion, up 24% year-over-year and 6% sequentially. Total consolidated revenue reached a record CAD 36.5 million, up 31% year-over-year and 4% sequentially.
Negative Updates
Reorganization Costs and Additional Near-Term Expense
Q1 reorganization costs were CAD 1.5 million before tax (about CAD 1.1 million after-tax impact reported in the Canadian segment). Management expects an additional CAD 4.0–4.5 million of reorganization costs in Q2 as the bank completes conversion to a U.S. bank framework.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Top-Line and Asset Growth
Total assets grew to over CAD 6.1 billion, up 24% year-over-year and 6% sequentially. Total consolidated revenue reached a record CAD 36.5 million, up 31% year-over-year and 4% sequentially.
Read all positive updates
Company Guidance
VersaBank guided to a year of accelerated U.S. growth and material operating‑leverage benefits, targeting at least USD 1.0 billion of additional SRP fundings in fiscal 2026 (more than threefold 2025) after completing over USD 200 million of Q1 fundings; at quarter‑end SRP stood at $4.4 billion (up 29% YoY, +9% QoQ) and total credit assets were $5.33 billion on a $6.1+ billion balance sheet (total assets +24% YoY). Management expects U.S. efficiency to move into the low‑20% range by year‑end (U.S. efficiency was ~40% this quarter and would be ~25% with $1.0–1.3 billion of scale), NIM to be relatively flat to slightly higher (Q1 NIM on credit assets 2.64%, overall NIM 2.25%), and non‑interest expense roughly flat to last year with upside for savings (Q1 noninterest expense $20.5M; $19.0M excluding reorg; DRT Cyber costs $2.8M). They warned of near‑term reorg costs of $1.5M before tax in Q1 plus an incremental $4.0–$4.5M expected in Q2, but said the planned divestiture of the cybersecurity business (aimed to close by summer) will provide meaningful regulatory capital to support growth; CET1 was 12.8% and leverage ratio 8.2% (both above internal targets), and provisions remained de minimis at ~5 bps of average credit assets.Versabank Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
70
Positive
Cash Flow
65
Positive
| Breakdown | TTM | Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 312.65M | 304.15M | 294.40M | 237.92M | 132.54M | 94.69M |
| Gross Profit | 129.24M | 120.23M | 111.63M | 108.03M | 81.94M | 65.80M |
| EBITDA | 48.95M | 44.59M | 57.43M | 59.43M | 34.49M | 32.52M |
| Net Income | 31.38M | 28.46M | 39.75M | 42.16M | 22.66M | 22.38M |
Balance Sheet | ||||||
| Total Assets | 6.15B | 5.81B | 4.84B | 4.20B | 3.27B | 2.42B |
| Cash, Cash Equivalents and Short-Term Investments | 628.00M | 582.66M | 226.21M | 133.19M | 89.53M | 271.52M |
| Total Debt | 103.97M | 108.51M | 108.58M | 110.62M | 109.42M | 100.39M |
| Total Liabilities | 5.60B | 5.28B | 4.44B | 3.82B | 2.92B | 2.08B |
| Stockholders Equity | 543.08M | 532.67M | 399.20M | 377.16M | 350.68M | 332.11M |
Cash Flow | ||||||
| Free Cash Flow | 130.31M | 149.44M | 254.13M | 94.36M | -33.23M | -108.32M |
| Operating Cash Flow | 129.98M | 150.40M | 272.70M | 94.72M | -32.65M | -108.31M |
| Investing Cash Flow | -200.34M | 212.26M | -157.58M | -28.14M | -141.61M | -8.44M |
| Financing Cash Flow | 371.18M | 102.04M | -23.33M | -17.31M | -6.30M | 131.40M |
Versabank Technical Analysis
Positive
21.03
Price Trends
20.97
Negative
19.98
Positive
18.03
Positive
Market Momentum
-0.26
Negative
53.63
Neutral
93.00
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:VBNK, the sentiment is Positive. The current price of 21.03 is above the 20-day moving average (MA) of 19.33, above the 50-day MA of 20.97, and above the 200-day MA of 18.03, indicating a neutral trend. The MACD of -0.26 indicates Negative momentum. The RSI at 53.63 is Neutral, neither overbought nor oversold. The STOCH value of 93.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:VBNK.
Versabank Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | C$567.12M | 11.42 | 9.36% | 7.95% | -13.69% | -1.60% | |
69 Neutral | C$956.88M | 11.86 | 11.93% | 7.33% | 7.74% | -31.96% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | C$4.11B | 12.46 | 8.72% | 2.09% | -7.50% | -34.45% | |
64 Neutral | C$674.42M | 15.26 | 5.89% | 0.49% | 3.31% | -39.12% | |
56 Neutral | C$560.24M | 16.44 | 5.09% | 10.00% | -9.00% | -35.22% | |
51 Neutral | C$1.80B | -21.78 | 2.86% | 4.67% | -11.26% | ― |
* Financial Sector Average
TSE:VBNK
Versabank
21.03
7.25
52.60%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.